Biz Beat Blog

Apartment execs aren’t worried about overbuilding

Looking at the number of apartment buildings going up in the Dallas area, it would be easy to predict a looming oversupply.

But apartment industry leaders say they aren’t worried the market in Dallas or in most other major U.S. cities will have too many apartments any time soon.

But the opposite might be the case.

“Nationally, overbuilding is not even in the discussion right now,” said Mark Obrinsky, chief economist of the National Multi Housing Council, an apartment industry group. “We are at least 100,000 starts (nationwide) away from meeting demand – and maybe more than that.

“The increase in demand we have seen is continuing to outstrip the supply we have coming on line,” Obrinsky said Friday at a meeting of the National Association of Real Estate Editors in Denver.

That’s true in Texas markets like Dallas, too, said Adam Fruitbine, managing director of Alliance Residential Co., a developer with projects in North Texas.

Fruitbine said most Texas apartment markets didn’t suffer the declines they did in previous real estate and economic downturns.

“There wasn’t a whole lot of damage to recover from.”

Terry Considine, CEO of Denver-based apartment investor AIMCO, said he expects that demand for rental units across the country will continue to rise for the next five or six years.

“That means that means that business will be good for landlords and rental rates are likely to rise,” Considine said.

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